‘Things can only get better’ was a common refrain in the election year that was 1997, and heralded what many then thought to be a new age of political enlightenment with a new administration. Despite the irony that we find ourselves in a virtually identical situation after 12 years of Labour ‘making things better’, I do see 2010 as a year of positive change for contracting.
Why am I so certain 2010 will get better? First, let’s look at what’s happening in the marketplace. Many of the contractor service companies that have seen a very slow 2009 say that the contractor market has started to pick up. More contract reviews, limited company incorporations, signings to contractor umbrellas and contractor accountancy services all mean there are an increasing number of contractors winning an increasing amount of contracts.
Client-side, I’ve met with some of the top IT contractor clients recently, most of whom are very bullish about the New Year and themselves talking about ramping up their IT contracting needs. Those who did not have positions to fill because recruitment had been frozen still had budgets to take on IT contractors. Others had new budgets starting in January 2010, allowing them to plan for growth and to bring in IT contractors to meet short-term demand.
On the contractor finances front, the Pre-Budget Report at the end of 2009 failed to live up to the forecasts of an all-out onslaught on contractors. Granted, there were few favours thrown our way and the highest-earning contractors will be paying more tax, but at least the 1p corporation tax delay was welcome. We can all be pleased, however, that there was no mention of income shifting, adding National Insurance Contributions to dividends from personal service companies or further measures aimed specifically at contractors.
We can expect an emergency budget from whichever party, or coalition, eventually wins the election (likely to take place in May 2010) in order that the UK’s public sector debt issue is tackled, but that will be a pain shared by everyone. And it’s to be hoped that in such a budget the role of contractors in maximising growth in the UK’s economy is recognised and incentivised, so that we don’t suffer a ‘brain drain’, helping no-one but our global competitors.
Despite very real fears that the Agency Workers Directive would be rushed onto the statue book to become law in 2010, sanity prevailed and its implementation has been properly put back until 2011. We’re not out of the woods on that one yet, though, as the consultation period over the proposed legislation was a ridiculously short period given the gravity of the laws. But we’re choosing to see 2010 as an opportunity to be vigilant and ensure that when the AWD does become law, contractors are not caught by legislation designed to protect others.
And so, as we hurtle out of the ‘noughties’ towards a new, as yet unnamed, decade, it just remains for the ContractorCalculator team to wish you all a Merry Christmas and a Happy, Healthy and Prosperous Contracting New Year!
Dave Chaplin is a former IT contractor in the City of London, and is founder and CEO of ContractorCalculator, and author of the Contractors' Handbook.
Started in 1999, ContractorCalculator (this site) is the leading independent website for the UK contracting industry – most of whom are highly skilled knowledge workers.
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Published: Wednesday, December 23, 2009
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